A Property blog by Paul Bennion, Managing Director, DEPPRO.
When these migrants come to Australia, they need homes to live thereby giving a boost to the overall property market.
ABS figures show that the New South Wales property market is the biggest beneficiary of net overseas migration, with 66,086 overseas migrations moving to the State during the 2014/2015 financial year followed by Victoria (54,052).
However, property markets in other States also benefit from net overseas migration such as Queensland where overseas migrants add around 20,000 new residents to the State’s population every year.
Another important benefit for the property market is that DEPPRO finds that these overseas migrants also become major investors in the local real estate market once they become established in Australia.
Net Overseas Migration By Region (2014/2015)
|State or Terrioty
However, our company is finding that many overseas migrants who purchase investment properties do not fully understand the tax benefits that they can obtain in Australia.
After arriving in Australia, many new migrants to Australia decide to buy investment properties as a way to create wealth without realising that there are generous tax benefits which they can claim relating to property investment in Australia.
For example, the tax laws relating to buying an investment property in the United Kingdom and Australia are very different in areas such as financial benefits relating to negative gearing and depreciation benefits.
In relation to tax deprecation benefits, overseas migrants for example, may not appreciate that the tax benefits obtained through depreciation can be equivalent to 60% of the total purchase price of the property.
Tips For Overseas Migrants Buying A Property In Australia:
- It is a good idea to rent in the area you would live to purchase a home. If you take out a lease for six months, this will give you enough time to find out if this is the area you would like to live and also give you time to research the local property market.
- If you find the location you want to live and the price range you can afford, then register your name with some of the larger real estate companies in the area. They will notify you of a suitable property as soon as it becomes available.
- Properties that have easy access to shops, schools and local transport are easier to sell at a later date.
- Traffic can be an issue because homes that are located in busy roads tend to have a lower resale value than a similar home on a quiet street in the same area.
- Check of all of the costs when buying a property because factors such as stamp duty can be much higher compared to other countries.
- It is a good idea to have pre-approval finance in place because this will ensure that you in a much better position to negotiate the price of the home and immediately secure a property which is within your price range.
- Swimming pool: Many people to Australia for lifestyle reasons and owning a swimming pool as a key part of this lifestyle dream. Some families, especially those with young children, buy an established home with a view to installing a swimming pool at a later stage. However, if you can find a home for a competitive price with a pool already installed, it may be that you have a lot less hassle and the resale value might be the same as a home without a pool.